Institution: Despite facing demand headwinds, Guizhou Maotai's first quarter profit is expected to increase.

Morningstar analyst Jennifer Song stated in a report that despite facing industry headwinds, revenue and profits for Chinese liquor producer Kweichow Moutai in the first quarter may have increased by 5%-6% compared to the same period last year. The company is restructuring its products, pricing, and distribution strategies, which Song believes will improve distributor inventory and cash flow, while also alleviating inventory risks. Song has lowered her net profit forecast for Kweichow Moutai for the years 2026-2029 by an average of 13% to reflect the short-term challenges faced by high-end products during the restructuring, while maintaining the forecast for the core Feitian Moutai business unchanged. Morningstar has revised its fair value estimate for the stock from 1,780.00 yuan to 1,680.00 yuan, noting that the stock is undervalued, but reforms are expected to enhance pricing capabilities and support long-term growth.